Hong Kong again hailed as Asia’s most expensive office market

It’s the only Asian location to exceed $200 per sq. ft. per annum

Hong Kong came in a close second in a list of the world’s most expensive office locations, next only to the London’s infamously expensive West End.

According to CBRE, Hong Kong’s CBD office rentals averaged at US$ 242 per square feet per year. Just across the bay, West Kowloon is US$81 cheaper at US$161 per sq. ft. per annum.

In spite of high costs, occupancy costs in both markets are anticipated to start increasing in the coming months, with signs of increasing demand from the finance sector and Mainland China companies.

“On the back of an improved global economic outlook, coupled with the recent announcement of the direct stock trading between Hong Kong and Shanghai, Hong Kong will be able to enjoy more competitive advantage over its key rivals such as Singapore and Shanghai, as a regional hub for key financial and business multinational companies. This certainly will bring sustained momentum for the city’s commercial office market and rents will remain strong,” stated Rhodri James, Executive Director of Office Services, CBRE Hong Kong.

Here’s more from CBRE:

Hong Kong (Central) remained the only market in the world other than London’s West End with an occupancy cost exceeding $200 per sq. ft. per annum.

Hong Kong (West Kowloon) dropped one spot to sixth place amid an 8.0% decrease in occupancy costs due to the addition of new office space at a time that occupiers are moving cautiously in the market.

However, occupancy costs in both markets are anticipated to start increasing in the coming months.

West Kowloon, just 10 minutes away via subway from Central, is already home to big investment banks and has emerged as an attractive location for cost-conscious occupiers looking for quality space near the central business district.

Leasing activity in West Kowloon had slowed down in the past year, but demand for smaller space picked up considerably after the Chinese New Year, although the market’s low vacancy level has made it difficult for larger occupiers to find suitable space options.